Meet the Doomsayers Waiting for the Economy to Crash

• Economic pessimists are becoming increasingly vocal in claiming that the economy is headed for collapse.
• Membership in the r/enomiccollapse subreddit increased by 80% between the end of 2021 and the end of 2023.
• There is a discrepancy between what experts consider a healthy economy and the experience of many individuals.

Daniel, a Reddit user based in Washington, DC, has been browsing the r/enomiccollapse subreddit for about four years. He says he’s not a pessimist, but he foresees an economic implosion for the United States, one that could mirror the collapse of the Soviet Union at the end of the Cold War.

Daniel, who asked to use only his first name to protect his privacy, has taken steps to prepare for his bleak vision of the future. He refuses to keep his savings in cash and invests all his money in a portfolio of defense stocks, gold, crypto, and other assets that he believes will maintain their value.

“The only thing our economy will be guaranteed is a war economy,” Daniel told Business Insider in an interview. “Only time will tell how much worse the situation will really get.”

Observers may be quick to dismiss the remarks as conspiratorial or alarmist, but a growing number of people in online communities on Reddit and elsewhere say their unease with the economy and material conditions in the United States leaves presage an imminent collapse.

The sentiment grew amid frustration and anxiety over the pandemic and never seemed to abate, experts say, even though most economists agree that the economy is probably doing well at the moment.

Interest in ultra-bearish positions on the market or economy is increasing based on raw research data. Google searches for the term “stock market crash” jumped 17% in the most recent quarter, while searches for the term “economic crash” jumped 15%, according to search analytics firm Glimpse.

The number of members on the subreddit r/economiccollapse has also increased in recent years, increasing by 80% between the end of 2021 and the end of 2023. The broader apocalyptic discussion forum, r/collapse, has also seen an increase in the number of members, up 26%. since the end of 2021, according to the analysis site Subreddit Stats.

In both communities, users are sounding the alarm about all sorts of doomsday scenarios for the economy, with some predicting a stock market crash, a housing market crash, or a total collapse of the U.S. financial system.

A member of r/enomiccollapse that Business Insider is linked to, who withheld his identity to preserve his privacy, said he believed the stock market would “collapse” if the Fed did not continue to raise interest rates. interest, causing a hyperinflation problem to spread throughout the economy. .

“I’ve only met a small handful of people in person who really know what’s going on,” they told BI. “I’m very pessimistic because I don’t have a lot of control over it and I haven’t seen any evidence that things are getting back on track.”

Another user warned that the recent rise in AI stocks could lead to a dot-com crash.

“Irrational exuberance and greedy speculation. Lots of money to be made in the short term, but a huge hangover once the party is over,” they wrote in an article. “I wouldn’t want to be found holding the bag when everything falls apart.”

Many pessimists argue that they are simply presenting a more realistic version of the situation. Freddie Smith, a Florida-based real estate agent, says he is not an alarmist but regularly posts warnings about the economy on his social media accounts. In a TikTok, he speculates that the economy today is even worse than it was during the Great Depression due to the higher cost of living.

“They continue to suck up the money, pushing people over the edge,” Smith said of the government’s treatment of the middle class. He expects an increase in homelessness and a growing number of people living paycheck to paycheck if economic reforms are not implemented.

Jonathan Rose, CEO of commodities company Genesis Gold Group, says he has also noticed growing anxiety among his customers. The number of investors he works with who have purchased physical gold specifically as a store of value has jumped about 40% to 60% since the pandemic, Rose estimated.

Rose said he believes some of the customers looking to hold gold are preppers and homesteaders, people looking to prepare for a major disaster or achieve a completely self-sufficient “off-the-grid” lifestyle. .

“People are looking to prep with metals,” Rose said. “There’s still a constant influx of people who are still looking to protect themselves and diversify. But I think in the last couple of years there’s definitely been an uptick.”

Perception and reality

The economic reality doesn’t quite match what many on these forums say they are preparing for.

The United States has avoided the recession predicted for two years. The labor market also remains relatively robust, with the unemployment rate remaining near historic lows in March.

Rose speculates that pessimism about the economy has increased since the pandemic began. This experience of uncertainty and fear has made people more aware of the risks facing the economy, he says, among them high levels of public debt, growing geopolitical tensions and stubbornly high inflation.

“I think there are just more problems today than there were 10 years ago. So people are concerned about these problems and saying we need to do something. And I agree with that.” , Rose said.

Many people may also be reacting to the fact that their lived experience of the economy may not match the strength of the published data.

America’s middle class is starting to suffer from the higher cost of living, and a Northwestern Mutual survey finds Americans’ financial anxiety is at its highest level since 2012.

“I certainly notice the higher prices and cost of living that inflation has brought us in restaurants and grocery stores,” said Richard Sylla, a financial historian at New York University. “Others may not be so lucky and may be constrained by these measures, which could impact their outlook on the stock market and the economy.”

Smith said he makes videos both to educate people about the economy and to express his frustrations with the working class.

“I watch these 23-year-olds online talk about how they work 40 to 50 hours a week and live with their parents,” Smith told BI. “The whole world has changed in the last ten years…I guess the frustration comes from the lack of recognition of a broken system,” he said.